The former minister of finance of Greece said bitcoin creates “feudalism” and should not replace fiat money because of its fixed supply.
Bitcoin and other cryptocurrencies cannot and should not replace fiat currencies, argued the former finance minister of Greece, Yanis Varoufakis. Additionally, he supported the popular narrative that counties should aim at adopting blockchain while averting from using BTC.
Bitcoin Cannot Replace Fiat
Speaking to the Greek Reporter, Varoufakis, who has never been a bitcoin fan, used the opportunity to bash the asset. He touched upon one of the most notable BTC merits – the limited supply – but actually said it’s the primary reason why the cryptocurrency cannot and should not serve as a currency.
“Suppose that with a magic wand Bitcoin replaces fiat money. This will be catastrophic. We would all be now in very dire straights. What will happen when we have a pandemic, and you need to increase the money supply? You cannot increase the supply of bitcoin because it is of fixed supply.”
It’s worth noting that while Greece’s former minister sees the 21 million BTC ever to exist as a drawback, other prominent names from the financial world have opined otherwise. For instance, the US legacy investors Paul Tudor Jones III, Stan Druckenmiller, and Bill Miller all recently referred to this feature as the main reason why they have bought portions of the asset.
Nevertheless, Varoufakis indicated that “bitcoiners celebrate bitcoin because it’s not state money,” but asserted that this “natural conclusion means that it can never be a currency.”
Blockchain not Bitcoin
This is one of the most famous narratives among people, organizations, and even governments who refuse to accept bitcoin. China is arguably the largest name that has repeatedly outlined its support for BTC’s underlying technology while reaffirming its ban on the cryptocurrency as an asset class.
Varoufakis supports this idea as well. He said during the interview that he had been an “admirer” of this “brilliant” technology.
“When I first looked at the blockchain code, I thought: My God, this is absolutely brilliant. A decentralized ledger which allows a complete record and full transparency while preserving anonymity in transactions. It is a piece of brilliance.”
Roughly a decade ago, he wrote an article calling blockchain a “fantastic solution to the problem we have not yet discovered. But it is not the solution to the problem of money.”
At the same time, bitcoin has no “democratic mechanism to determine” who gets the mined bitcoins. In fact, Greece’s former finance minister believes BTC actually creates “a kind of feudalism,” which is run by the early adopters.